RBI governor hails govt move to slash corp tax, says it will help economy
New Delhi: Minutes after Union Finance Minister Nirmala Sitharaman announced corporate tax rate cuts, Reserve Bank of India Governor Shaktikanta Das hailed the move and called it a 'bold & welcome' step to put the growth engine back on track.
"This is a very bold measure. These tax rates bring us closer to the rates of all the emerging economies in this part of the world. There's a lot of competition between Vietnam, Philippines and India to attract international investments."
Das said the financial stability will have to be watched in the wake of tax cuts and government must look at the quality of expenditure, adding that some room for land and labour reforms is still there.
The Finance Minister on Friday slashed to 22 per cent for domestic companies and 15 per cent for domestic manufacturing companies formed after Oct 1, in a bid to revive the ailing manufacturing sector in the country.
"We today propose to slash the corporate tax rates for domestic companies and for new domestic manufacturing companies," the Finance Minister stated at a press conference in Panaji, Goa, ahead of the Goods and Services Tax Council meeting.
The reduced tax slabs, effective from Apr 1, can be claimed by the companies after the expiry of the current tax holidays and concessions they are availing.
In effect, the domestic companies, not availing cess and incentives, will enjoy 22 per cent slab, while others will have to pay 25.17%.
New domestic manufacturing companies will have to pay 15 per cent without any incentive, and 17.01% with benefits.
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